This is part of a series of articles by Liberty Nation author Andrew Moran examining how socialism has failed the countries and the citizens it was meant to benefit. Last week, Andrew examined Venezuela.
Adolf Hitler and the Nazis are forever etched in history for the pain, plunder, and pillage they inflicted on Europe. The death camps, the global conquest, the reckless abandonment of human dignity -- these are all synonymous with the Fuhrer and his henchmen, from Joseph Goebbels to Heinrich Himmler.
Since the end of World War II, historians have done a remarkable job of answering the five Ws, and, to this date, they continue to uncover new information pertaining to the mysteries of Hitler’s rise, the Nazis’ broad and lengthy support from Germans, and how odious the National Socialists were.
But there is one area that researchers have neglected: Hitler’s economics.
Unfortunately, when they delve into the topic, intellectuals typically praise Hitler’s so-called economic miracle that rescued the Weimar Republic from hyperinflation, unemployment, and widespread poverty. Like so many other economic events of the 20th century, historians often get it wrong on the state of Berlin’s economy, marked by deficit-financed spending, currency manipulation, and other socialist hallmarks.
The 25-Point Manifesto
To understand the socialism of Nazi Germany, begin with the National Socialist German Workers' Party’s 25-point manifesto, authored by Anton Drexler and Hitler. Writing in Mein Kampf, Hitler explained the 25 points:
“The program of the new movement was summed up in a few guiding principles, twenty-five in all. They were devised to give, primarily to the man of the people, a rough picture of the movement's aims. They are in a sense a political creed, which on the one hand recruits for the movement and on the other is suited to unite and weld together by a commonly recognized obligation those who have been recruited.”
Some of the objectives back then are eerily familiar to proposals today: “big industrial companies should share their profits with the workers,” a state-run jobs-guarantee program, government takeover of private land, free college tuition, and so much more. When the Nazis obtained power, they instituted a lot of what was in the manifesto – and more.
Because of the ballooning anti-capitalist sentiment of the Golden Era (1924 to 1929) among Germany’s elite, there was an appetite for socialism.
And Hitler fed these intellectuals.
Nazi Economics
Hitler’s socialism was a concoction of classical and modern. He integrated quasi-nationalization with an immense welfare state, government stimulus efforts, central planning, and huge budget deficits. Such interventionist schemes have been mirrored ever since then, which could explain why the country’s 1930s economics are often ignored in present-day discussions, especially as the left routinely compares President Donald Trump to the dictator.
Here are some of the first policies implemented by the chancellor:
Launched public-works projects.
Created government jobs programs.
Shielded industry from foreign competition.
Instituted capital controls.
Established universal healthcare and free education.
Unlike Soviet Russia, the Nazis did not nationalize the means of production. However, business owners were prohibited from setting prices determined by the market; they were forced to set prices, provide wages, and make production decisions based on what the Nazi leadership wanted. Eminent economist Ludwig von Mises famously wrote in Human Action that these Germans were “no longer entrepreneurs, but only shop managers (Betriebsführer).”
The Nazi welfare state was generous...
Also, between 1936 and 1939, the Third Reich hiked corporate taxes, from 20% to 40%, arguing that it was time for large businesses to pay their fair share after benefiting from the government’s ambitious rearmament campaign. The war on private profits did not end there. Berlin taxed stock transactions, capped annual dividends at 6%, and mandated stockholders to exchange their stocks for government bonds to finance the war.
As the walls were closing in on the Nazis, the government approved expropriating the personal wealth of large swaths of the rich population. These assets were converted into government bonds to fund the war chest.
The Welfare State
The Nazi welfare state was generous, even in the years leading up to Hitler’s downfall.
Welfare benefits consisted of unemployment insurance, old-age pensions, retirement homes, interest-free loans for newlyweds, rent supplements, monetary aid to children born of German soldiers and women living in occupied territories, and financial assistance for the physically disabled.
Government did everything to maintain the support of the people, going as far as offering new furniture to households impacted by the bombing campaigns of the Allied forces.
Because the country’s finances were a mess, the budgetary office urged lawmakers to rein in their spending. The government rejected these pleas in an attempt to keep up morale.
This could be part of the reason why Hitler enjoyed support for as long as he did – because his beneficiaries always got theirs no matter how much it cost in marks and lives.
Did It Work?
During the Four Year Plan of 1936, Berlin’s budget deficit exploded. When Hitler succeeded Paul von Hindenburg, he inherited about 11.7 billion Reichsmarks of debt. By 1939, this swelled to 48.5 billion Reichsmarks, as well as an additional 20 billion Reichsmarks not shown on official Treasury statements.
Germany had no other choice but to utilize the wealth of conquered countries, relying on taxes, currency manipulation, and confiscation to keep the Reichstag doors open.
Shortages were common, too. When goods became scarce, Reich minister Hermann Goering ordered soldiers to take any plunder they could from invaded nations and bring it back home. Cheese, coffee, furniture, jewelry, and champagne – soldiers stole everything. Desperate to restock store shelves, Goering removed an order that required all soldiers to stand straight and tall because then they could fill their bags with more products from France and The Netherlands.
Like every other socialist experiment, the Nazis did not create a utopia.
Hitler’s New Deal
For years, academics have been stumped by the question: “How could Nazi Germany have happened?” The response, no matter how uncomfortable it might be, may lie in today’s public policy endeavors.
Across the world, a fierce anti-capitalist streak runs through the political arena, resulting in politicians taking advantage of the envy among the poor and middle-class and disdain for the affluent. Every election cycle, an incumbent or political candidate promises free goodies for all – free tuition, free healthcare, and free money – dismissing the cost or social consequences.
Because of this, the populace turns a blind eye to the corruption, mendacity, or ignorance of esteemed representatives. How else could Democrats hold on to power in cities like Detroit and Atlanta for decades despite their disastrous record? What allowed former President Barack Obama to hold the throne for eight years? Why did Alexandria Ocasio-Cortez become an overnight rock star?
When you are given something for nothing, you are less inclined to complain and more likely to ignore the adage: “There ain’t no such thing as a free lunch.” This is what happened in 1930s Germany, and this is what’s happening worldwide today.
Socialism channels the Mephistophelean spirit, showering the public with short-term prosperity and pleasing every whim for equality and desire to punish the fat cats. We feel warm and content in the present because we disregard the ramifications to be felt tomorrow. The eternity of global suffering that socialist collectivism begets can be thwarted; optimism for individualism can and will reign supreme as Johann von Goethe wrote, “He who strives on and lives to strive / Can earn redemption still.”
Nazi Germany practiced another form of socialism – and it failed, as it always does.
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